Government gets tough on illegal holiday lets!

THE Canarian Government has this week delivered a frightening reminder to those who let their homes illegally by imposing a near-200,000-euro fine on a Tenerife property-lettings company.

The owners of the long-established firm in the south of Tenerife told Canarian Weekly: “Two men from the Government visited our office, stating who they were and the reason for their visit.

“They requested that we provide them with information about our lettings. They had a whole list of businesses, as well as us. We had to submit detailed information within 15 days.

“A number of weeks later they came back and issued us with a huge fine because we had short-term lets advertised.

“Through providing further information and duplicity on the government’s part the fine has now been substantially reduced, but our case is ongoing and the fine is still horrific.”

The whole crux of the matter is that you are not permitted to let on a short-term holiday basis on a residential complex. The owner of the property is equally in the wrong as well as the agent, and some owners have been fined a minimum of 30,000 euros.

The company spotlighted by the Government inspectors this week feels their actions are detrimental to the tourist industry and the property market as a whole.

And they point out quite forcibly that the size of the fine in no way equates to the alleged “so-called” crime that has taken place in their case.

Yet it is well known that Tenerife Tourism officials have been stepping up their campaign against wilful owners throughout the year.

It was made plain in January that they would be increasing the number of inspectors from four to 17 in a bid to crack down on the illegal lettings trend.

They have even been visiting apartment complexes throughout the South, seeking out those who are renting their apartments. And they have made it clear that owners breaking the law will be fined from 30,000 euros upwards.

The inspectors have also been checking online Tenerife holiday websites – with some success, it must be said!

The controversial 1995 Letting Law made many apartment complexes illegal for holiday lets. Yet owners on many new residential sites and complexes continued to let their properties out and were fined only occasionally.

Then followed strong complaints by Ashotel (The Tenerife hotel association), who claimed its members were losing out because of the illegal “beds”, which prompted a lengthy investigation by the Tourism Board.

The Law clearly states that complexes deemed “residential” cannot be used for holiday lets at all. On the other hand, touristic apartments can obviously be let out for holidays, but only if a sole agent has been appointed to the complex to handle all transactions.

Touristic apartments can also be let on a long-term, residential basis, or be used by friends and family, independently of an agent because such use does not qualify as commercial holiday letting.

By the same token, residential apartments cannot be let out commercially and there is, naturally, no on-site agent. But there is nothing to stop properties being used by friends and family for holidays, or even on a long-term basis.

As for private villa owners, they can – in theory at least – apply to the Tenerife Cabildo to register their property as touristic. This would require, however, the granting of a touristic licence.

But since the moratorium on touristic licences has been in place over the last several years, the only licences granted are for the construction of high-end hotels.

Lawyer Mariano Zunino Siri, registered with the Tenerife Bar Association told Canarian Weekly, “Confusion arises between a civil law matter (long-term or short-term letting agreement) regulated by the Rental Agreements Law or Civil Code and the administrative law matter (authorization to operate in tourism activity including tourist rental agreements) which is regulated by the Autonomic Law.

“Every owner has the right to rent his own property (within the laws) according to the Rental Agreement Law (Ley de Arrendamientos Urbanos) or Civil Code (Código Civil). Within the Civil Code system would be included the tourist activities whose rules are regulated by the Canary Law of Tourism. This law affects only the tourist aspects of the service rendered.

“If you are signing a long-term rent (not tourist activity) there would be no problem with inspectors. In addition, all rental contracts must be included in the tax return (Impuesto a la Renta) every year either if you are resident or non-resident.

“Take into account that, the difference between “residential complex” or “tourist complex” is an administrative matter which means that the Canary Tourism Council is the authority that gives the permit to developments to operate tourism activity (if the complex matches with the regulations of Tourism Law). According to the Tourism Law there should be only one company allowed to deal with tourist rental agreement in every complex (this way no individual can deal directly with tourist rental agreements and if so, the owner could be fined).”